Former Astros general manager Jeff Luhnow, Formula 1 promoter Tavo Hellmund and ballplayer-turned-banker Tim Clark have filed for a new blank-check business: SportsTek Acquisition Corp. The sports-focused special purpose acquisition company seeks to raise $125 million in an IPO.
Joining the trio are a number of other notable executives, including San Antonio Spurs CEO R.C. Buford and Sashi Brown, chief planning and operations officer for basketball at Monumental Sports, the owner of the NBA’s Washington Wizards and the NHL’s Capitals.
SportsTek seeks “to focus on a target within the sports and related sectors. Examples of areas that the team intends to focus on include sports franchises, media, data analytics, and technology and services businesses serving those end markets, among others,” the company said in its prospectus.
The business proposal seeks to lean on the deep business experience of Luhnow, Hellmund and Clark, naming eight specific sports – from baseball to rugby – as areas of expertise as well as the U.S., Latin American and Europe regions. “There are a number of sectors related to the broader sports ecosystems that have developed rapidly to enhance the fan experience, improve performance and to drive results. In addition to leagues and teams, the universe of sports-related companies includes brands that target sports fans and participants, content creators, entertainment product providers, data analytics, athletes and organizations catering to all levels from youth to amateur to professional,” the preliminary IPO document stated. The prospectus was filed with the SEC this morning.
Luhnow is the chairman and co-CEO of the business. As general manager and head of baseball operations for the Houston Astros from 2011 until January 2020, Luhnow built the team into a perennial contender, in part by using high draft picks collected from several years as the worst team in baseball (including a 51-111 record in 2013). Luhnow was dismissed from the Astros last January and banned from Major League Baseball for 12 months as part of the Astros’ extensive sign-stealing program, which was led by Alex Cora and Carlos Beltran, according to MLB’s report. Luhnow denied knowledge of the team’s scheme, which alerted batters of incoming breaking balls with bangs on a trash can.
Before taking over the Astros, Luhnow was a longtime player development specialist for the St. Louis Cardinals. Prior to entering baseball, he was founder of Archetype Solutions, which developed algorithms for clothing brands to smartly correct for consumers’ shopping biases. He also was as an executive at Petstore.com and a consultant at McKinsey & Co. The prospectus says he spent most of 2020 assisting investment groups looking for opportunities in baseball, soccer and esports.
Co-CEO with Luhnow is Hellmund. The racing exec is best known in the U.S. for helping bring Formula One racing to Austin, Texas, and founding the Circuit of the Americas racetrack in 2010. He later brought F1 to his native Mexico City. He leads four companies that specialize in promoting, brokering and producing more than 200 events in grand prix and for the corporate world. His events have sold more than 15 million tickets and generated $1.4 billion. He also developed one of the first rear view mirrors with no blind spot, for General Motors. Hellmund is also on the board of directors, while Luhnow isn’t.
The chief financial officer, chief operating office and a director of the SPAC is Tim Clark, a managing director at Hall Capital Partners, where he leads private investment at the closely held firm owned by Oklahoma’s Hall family. He also is the managing partner of Tulsa Capital, which acquired Pryer Aerospace, a specialty sheet metal manufacturer. Clark also worked at Gridiron Capital for nine years and was managing director for investment banking at Stifel Nicholas. Clark has sports experience both as a former executive at Rawlings, a current director at Athletic Supply, and previously as a minor leaguer in the Cincinnati Reds organization and a scout for multiple organizations.
In keeping with the executives’ background, SportsTek discusses the potential for technology to help sports grow and adjust to the post-pandemic world. “While the in-person experience will always be a valuable component for any fan, we believe the industries can survive, and even thrive, being delivered into homes and on-the-go to devices through continued innovation and the use of technology. We believe this represents an opportunity, as a major impact of the pandemic was organizations having to quickly reduce costs and improve efficiencies.” Among those efficiencies are data monetization, increasing sponsorship opportunities and athletic performance improvement, according to the filing.
Helping the SPAC in its hunt is Sashi Brown, responsible for strategic initiatives and supporting team operations in basketball at Monumental Sports, the parent of the Washington Capitals, Mystics and Wizards, among other properties. He previously was chief of football operations for the Cleveland Browns. Brown is on the board of directors for SportsTek.
Joyce Johnson is also on the board. She’s chairman and chief investment officer of Pacific Gate Capital Management, an investment manager focused on private credit transactions. She’s also been a partner at Relativity Capital and a managing director at Cerberus, both private equity businesses. Johnson also sits on the board of speciality metals manufacturer Kymera International.
Rounding out the board of directors are two additional executives. Sebastian Park was the first dedicated esports executive in North American sports, when he was hired by the Houston Rockets in 2016. He left the organization in 2019 and worked briefly for a Harris Blizter Sports division that year. Park is the founder of Clutch Gaming, a franchise in the League of Legends Championship Series. Endre Holden was briefly managing director at coaching and performance business The Miles Group in late 2019 through spring 2020, and previously spent nearly 20 years at McKinsey Group, the consulting firm, most recently as senior partner. Holden is on the board of sports analysis software firm Hudl and Nordic Semiconductor.
SportsTek also has retained a board of three advisors to assist the business. Most notable is R.C. Buford, the CEO of San Antonio Sports & Entertainment, the parent of the NBA team as well as a G League squad and the lower division pro soccer team in the Texas city. Prior to joining the Spurs as a scout in 1994, Buford was a longtime basketball coach for the NBA’s Spurs and Clippers, and he coached on the collegiate level at Kansas and Florida. Joining Buford is James Carney, an expert in electronic trading, and Hugh Forrest, the chief of programming for SXSW, an Austin, Texas series of festivals and conferences.
SportTek is proposing to sell 12.5 million units of one share and one-half of a warrant, the right to buy another share at $11.50. O’Melveny & Myers, a law firm with a strong sports practice, is the counsel for SportsTek on the deal. Stifel is the sole underwriter for the IPO with lawfirm Paul Hastings representing the underwriter.
A spokesperson for SportsTek SPAC wasn’t immediately available.
SPACs have emerged as the favored way of bringing companies public. A SPAC like SportsTek raises money in its own IPO, then merges with a company seeking to go public without the time and expense of its own IPO. There are more than 40 sports-related SPACs with $15 billion in capital seeking to go public on the clock for an acquisition. In SportsTek’s case, it will have 24 months to acquire a business or it will need to return IPO capital to shareholders.
SportsTek doesn’t appear to be related to any other similarly named businesses, including the California medical business, the Boston-area sports surfaces installer or the sportswear brand Sport-Tek.
(This story has been updated in the second and tenth paragraph to clarify Sashi Brown’s role at Monumental Sports.)
